While mass layoffs occurred at Amazon and Apple, etc., while “outpacing cost growth,” structural changes began last year with 1.75 million people hired at restaurants and hotels.
On the 2nd, Amazon announced that it recorded an annual loss of $2.7 billion in the fourth quarter, losing almost half of last year’s value, saying, “Its North American business grew 13%, but costs still outpaced growth.”
Amazon had nearly doubled its workforce to more than 1.6 million by early last year, but in November CEO Andy Jassy began cutting a total of more than 18,000 jobs.
Other tech companies that quickly hired during the pandemic, including Facebook's parent company Meta, Microsoft and Salesforce, also saw job cuts follow.
The U.S. Department of Labor announced on the 2nd that the number of posted jobs per available unemployed person, which had been easing in recent months as the number of jobs rose to 11 million last year, rose again to 1.9, indicating tight employment growth.
As for the 5.5% increase in U.S. jobs last year, the New York Times said, “It has surged to 1.74 million posted jobs, driven mainly by hotels and restaurants that are steadily recovering from the pandemic.” While the focus is on wage inflation in the sector, hourly earnings growth in private services is slowing, as is wages.”
On Amazon's fourth-quarter earnings of last year, "it earned $300 million, or 3 cents a share, in the October-December quarter, but industry analysts, according to FactSet, expected the Seattle-based company to earn 17 cents a share," he said. The commerce giant's earnings were hurt by a $2.3 billion amortization of the value of its stock investment in electric vehicle startup Rivian Automotive, while Amazon's fourth-quarter profit raked in nearly $12 billion from its investment in Rivian Automotive. This is a significant decrease from the $14.3 billion recorded in the same period in 2021 when it benefited,” the AP said.
Apple's stock plunged 5% on the day, more than Amazon's.
Sales declined quarterly in the fourth quarter of last year for the first time in nearly four years after sales of the newest iPhone collapsed, dropping 5% year-over-year to $117 billion during the period and marking a deeper slump than analysts expected.
It marked the first quarterly decline in revenue for Apple since the first quarter of 2019, when sales fell 5% in the aftermath of slowing iPhone demand and the trade war with China launched by then-President Trump.
Apple's drop in earnings totaled $30 billion in net income ($1.88 per share), a decrease of $13 from the year-ago quarter, lower than the $1.94 per share target set by analysts polled by FactSet Research, and shares fell 5% on the 2nd. .
Google announced a year-over-year quarterly decline in digital advertising sales on Wednesday, following Apple's poor performance.
"Wall Street now looks set to reassess the situation in light of Apple's recent results and continued concerns about the possibility of a recession as interest rates rise to contain inflation," said Investing.com analyst Jesse Cohen. There are certainly some challenges facing the tech sector in the current economic environment of rising inflation,” he told The Associated Press.
In its quarterly fortunes slump, Apple has signaled that it has no intention of resorting to mass layoffs, but other tech industry giants Alphabet, Microsoft and Amazon Metaplatform are reducing their reliance on the digital realm, adapting to slowing earnings and stagnation, and mass layoffs. The layoff plan was announced one after another.
Google's parent company, Alphabet, announced on the 2nd that its ad revenue fell nearly 4%, with revenue rising slightly in the fourth quarter of last year, as declining online ad spending and competition from rivals put a strain on the search giant.
YouTube revenue fell 8% year-over-year, causing the stock to plummet in after-hours trading.
The company earned $13.62 billion, or $1.05 per share, in the fourth quarter, down 34% from $20.64 billion, or $1.53 per share, in the year-ago quarter.
Revenue was $76.05 billion, up 1% from $75.33 billion.
Analysts in their FactSet research expected Alphabet to post earnings of $1.18 per share on revenue of $76.2 billion for the period, which was lower than expected.
Alphabet announced cuts of 12,000 jobs, or about 6% of its workforce, in December of last year, signaling the biggest layoff by a US tech company.
Overall, about 50 million Americans will quit their jobs in 2022.
“In another sign of confidence among workers, people voluntarily left their jobs at about the same rate as in November,” the NYT said. Employee turnover as a share of the total employment base has declined slightly from 3% at the end of 2021, but has stagnated over the past few months,” he said. said.
"With layoffs in the tech industry growing rapidly, those leaving tech jobs with software development and engineering skills may have discovered new opportunities too soon and not filed for unemployment benefits," the NYT said. Most likely occurred after the labor turnover survey ended. Other indicators that employers are laying off workers, such as initial claims for unemployment insurance, also remain at very low levels by historical standards.”
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